An HR Glossary for HR Terms

Organizational Chart

What is Organizational Chart?

An organizational chart is a visual representation of an organization’s structure that illustrates the hierarchy and relationships between departments, teams, and positions. It is essentially a snapshot of the chain of command, which is used to help employees understand the reporting relationships associated with their roles.

What are the different types of organizational charts?

  • Hierarchical: Depicts a top-down structure to show how the chain of command flows through different levels of management and staff. This format is commonly used by most organizations.
  • Matrix: Illustrates both vertical and horizontal reporting relationships that connect teams and managers across different departments. In this setup, employees have dual reporting relationships – usually with a functional manager and a project manager.
  • Flat: Reflects a more decentralized structure with fewer levels of hierarchy between employees and the top leaders. Employees have greater autonomy and a broader range of responsibilities. This structure is commonly found in small to mid-sized companies, startups, and organizations that like to prioritize agility and rapid decision-making.
  • Divisional: Organizes employees by business category, typically by product, market segment, or geographic location. Each division operates as a semi-autonomous unit and has its own management, resources, and support functions. 

What are the key components of an organizational chart?

To provide clarity, an organizational chart should include:

  • The names of all organizational members
  • The positions and titles of each member
  • Both direct and indirect lines of reporting
  • Depiction of the various departments, teams, or units and how they are broken down

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